Commissioner, Commercial Tax vs R.B.B.R.L., Contractor

Arun Tandon, J.—Heard learned counsel for the parties. This commercial tax revision has been filed by the Department against the order of the Tribunal dated August 27, 2011 passed in Second Appeal No. 380 of 2011. The Tribunal has set aside the order passed by the Joint Commissioner in exercise of power u/s 48(7) of the U. P. Value Added Tax Act, 2008.

Facts in short giving rise to the present tax revision are as follows :

Vehicle No. RJ14-1G/6287 was intercepted on June 23, 2011 by the Mobile Squad of the Commercial Tax Department. On inspection it was found that the truck was loaded with plastic dana, pipe and footwear. There is no controversy with regard to pipe and footwear. The facts stated hereinafter are confined only to the transportation of plastic dana.

According to the documents produced at the time of inspection bilty No. 277 of R.B.B.R.L. along with invoice No. 56 dated June 21, 2011 of M/s. Radiant International, Delhi and another bilty No. 279 accompanying the goods disclosed that 81 bags of plastic dana was being transferred from Delhi to Bihar. On physical verification, it was found that these 81 bags in fact contained master batch (colourant to be used in the manufacture of plastic goods) which goods had not been declared to the attending documents. The goods to that extent were seized in exercise of powers u/s 48 of the U. P. Value Added Tax Act, 2008. A show-cause notice was issued to the dealer for submitting his reply. According to the assessee, the goods as transported were also plastic dana on which same rate of tax applicable in the State of Uttar Pradesh was also same. Therefore, there was no discrepancy in the documents accompanying the goods.

The explanation so furnished did not find favour with the authority concerned and it was found that while the market rate of plastic dana was only Rs. 58 to 60 per kg., the market price of the master batch (colourant to be used in the manufacture of plastic goods) was nearly Rs. 120 per kg. Accordingly, an order of seizure was passed on June 13, 2011.

Not being satisfied with the orders so passed, the assessee filed representation u/s 48(7) of the U. P. Value Added Tax Act, 2008 before the Joint Commissioner (SIB), Commercial Tax, Etawah, which was rejected vide order dated July 22, 2011.

The assessee thereafter approached the Tribunal by means of the second appeal. The Tribunal has recorded in the order impugned that no evidence would led by the Department to establish that master batch was something different from plastic dana. Thereafter it has proceeded to explain by way of an example that there may be some difference in the description of the goods like when wooden tables may be transported in fact while the goods declared in documents may be wooden almirah. Such misdescription is not of much relevance as the rate of tax is the same.

The learned counsel for the Department challenging the order so passed vehemently contended that master batch and plastic dana are two different commodities known as such in the market. The Tribunal has completely lost sight of the said fact while passing the order impugned. He submits that master batch is used as a colourant in manufacture of plastic goods. If the Tribunal had any doubts qua the identity of the goods so seized, expert opinion should have been asked or else it could have remanded the mater to the assessing authority for obtaining an expert opinion in the matter.

This court finds that the reasons recorded by the Tribunal are wholly inappropriate. Merely because the rate of tax on the goods is one and the same, it cannot lead to a conclusion that both the goods are to be treated as one and the same. The Tribunal in fact has proceeded on a presumption that plastic dana and master batch are one and the same commodity. The presumption so drawn is based on no evidence or material.

This court finds that the Tribunal has proceeded on the basis of presumption instead of getting the correct facts known if required through expert opinion. There is force in the submission of the counsel for the Department. For the aforesaid reason, the order impugned cannot be legally sustained.

The order of the Tribunal is hereby quashed. The matter is restored at the second appellate stage with the direction to the Tribunal to get the identity of the goods seized verified through expert opinion and thereafter to pass fresh order in accordance with law. Let the exercise be completed within six weeks from the date of production of a certified copy of this order before the Tribunal.

Revision is allowed subject to the observations made.